Dear Jason,
When I have brought up the issue of indemnity with the MBA it seems very opaque.
No one seems to know where the money is going and there is no apparent transparency available.
As I understand it , the government underwrites QBE, the monopoly insurer, as no other insurer wanted to do it.
It would be interesting to see the books to know things like :
- How much is being paid out in indemnity insurance?
- Separated by custom builders and by volume builders. (Remember custom builders were grandfathered in to a lower rate and I’m not sure where that stands now.)
- How much is paid for claims ? Seperated once again between custom builders and volume builders.
- Where is the difference going? Is it a government piggy bank?
- Is there a reasonable deal right now? On the face of it and considering the Niche Living debacle, it doesn’t seem so. If all that insurance is paid, the obvious question is why is the government doing the bail out?
Maybe I’m naive and don’t understand the overall arrangement but considering recent events, something seems very wrong. We should at least be able to have access to the figures.
Perhaps the only way to force the issue is to have the other side of politics table this in parliament and get the press involved.
The MBA and HIA don’t seem to want to involve themselves.
Regards
Name of builder withheld
Response from Jason Janssen
02/12/24
You make a number of salient points. Most importantly, your central call for transparency is key to understanding most of the things we believe need to be known about the present insurance arrangements.
Simply put, how can we know the answer to the questions you and others pose including, as you ask:
- “How much is being paid out in indemnity insurance? Separated by custom builders and by volume builders. (Remember custom builders were grandfathered in to a lower rate and I’m not sure where that stands now.)
- How much is paid for claims ? Seperated once again between custom builders and volume builders.
- Where is the difference going? Is it a government piggy bank?
- Is there a reasonable deal right now? On the face of it and considering the Niche Living debacle, it doesn’t seem so. If all that insurance is paid, the obvious question is why is the government doing the bail out?”
On top of that there are major questions to be asked about the impact and the wisdom of the government’s decisions in cases like Niche Living, where one decision wipes out more than the whole of the surplus in the funds without even pursuing the insured (Niche Living) for even a small contribution.
Hybrid schemes where government underwrites a private business always pose problems of proper accountability and that is why the saying “sunlight is an excellent disinfectant” has come into use. Problems are almost inevitable when a government supported monopoly is the only choice available as is the case with indemnity insurance. And it seems to the HBAG that – with a government guarantee or underwriting – it should be possible to have some choice that would result in competition and alternatives.
HBAG will keep you informed as we develop the policy to be put to the political parties by the first two weeks in January.
Thanks again.
Yours sincerely
Jason Janssen
0412 373 404
CHAIRMAN
Home Builders Action Group